Employee Expense Fraud Red Flags

Most employees are honest, and most employers want to give their team as much credit as they can. But a recent study found that employee expense fraud makes up around 15 percent of all types of fraud in the business world today. This ranges from minor things like charging something that isn’t allowed to much larger cases of submitting non-existent expenses in order to get ‘reimbursed’.

Companies need to fight against employee expense fraud, and the first step to doing so is taking the time to fully understand the various red flags that could help point towards fraud being present. Generating a data report with your expense software will make it easier to see these red flags and start doing something about them.

Red flags that employee expense fraud is present include:

One employee is spending far more than others, even when sent on the same or on similar business trips.

Expenses are being processed on weekends and days that aren’t working days.

Closer examination could show that larger expenses are being broken down into smaller charges.

Trip costs fluctuate wildly, with one trip costing a small amount and the next costing thousands.

It’s important to remember that there are sometimes viable. For example, a four star dinner might be needed to woo that client. But if your employee is spending $200 on every meal during a trip, they’re probably taking advantage of you and the company.

Start by scanning your data reports for red flags, and then spend a little time getting to the bottom of each one of those flags. You might find that the employee has done nothing wrong, but you could discover that you’re losing money to fraud – money that should be going in your company’s bank account. Fraud happens, and knowing how to spot it is important for any company. The tips above can help you recognize employee expense fraud and help you move towards eliminating it.